NRB has relaxed KYC provisions for small depositors

KATHMANDU,NEPAL

 The Know Your Client (KYC) provision for banks and financial institutions has been relaxed for small depositors with bank accounts of up to Rs 500,000.

The banks and financial institutions had been urging the Nepal Rastra Bank (NRB) to think on the issue stating that it is creating problems in opening new accounts and updating the existing ones. But those with deposits of over Rs 500,000 will have to provide citizenship certificate number of three generations, profession, estimated annual income and other information while opening a bank account or have to update their existing accounts by mid-June. The central bank, however, has stated that the banks and financial institutions can also seek information from small depositors if deemed necessary.

The bankers claimed that the NRB’s definition of small depositors is not practical and argued that this alternative is not suitable as even the small depositors will have to fulfill the KYC provision if they come with big deposits. “These provisions are impractical when the banks and financial institutions are already informing NRB about suspicious transactions,” a banker told Karobar. But NRB Spokesperson Bhaskar Mani Gyawali stated that the banks and financial institutions will not have any problem to expand their client base when it has already exempted the deposits of up to Rs 500,000.

The banks and financial institutions had been claiming that they were facing problems in making clients in newly opened branches due to the KYC provision. NRB had issued the KYC directive to the banks and financial institutions to discourage money laundering and financial investment in terrorism.

NRB had issued the circular as per the clause 79 of the NRB Act, 2002 which provides all regulatory authority to the central bank. NRB has also allowed Nepali commercial banks to open their branch abroad. The banks that have maintained paid-up capital as fixed by the central bank and for the past one year also maintained a buffer capital of additional one percent can open contact office abroad.

Source: Karobar Daily, April 6th 2013

You may also like:
Jewellers claim 85 percent of Gold from Black Market 

Read More

14 firms bribe NEA officials to get 24-hr electricity

KATHMANDU, NEPAL:

A government probe has concluded that 14 firms along the Itahari-Biratnagar industrial corridor saved energy bills worth at least Rs 50 million over the past three months ending mid-April by influencing officials of five distribution centers of Nepal Electricity Authority (NEA) to provide them round the clock electricity even during load-shedding.

The firms paid just Rs 6 for a unit of electricity. Power generated from generators would have cost them around Rs 25 per unit.

“As the irregularity is of large scale, the investigation team has recommended that the government probe further in order to identify the NEA officials who unlawfully supplied electricity to private firms,” a member of the investigation team told Republica on Sunday.

Ministry of Energy (MoE), which looks after NEA, had formed a five-member probe to look into the issue following widespread criticism.

According to sources, owners of the firms ensured round the clock electricity to their production facilities by paying kickbacks to officials of different distribution centers of NEA. Those firms had managed to get uninterrupted power supply from NEA´s distribution centers in Itahari, Duhabi, Biratnagar, Dhankuta and Siraha.

The team submitted its report to the ministry last week after conducting field study.

“The probe team looked into electricity supply scheduled of the five distribution centers. We found that those distribution centers supplied electricity to the 14 firms going against the nationwide load-shedding schedule,” the member added.

According to MoE officials, locals had complained about the issue last year as well. But their complaints were not entertained. “No one showed interest to look into the issue then,” an official at MoE said preferring not to be named.

The firms that enjoyed round the clock power supply by influencing NEA officials are Raghupati Jute Mill, Baba Jute Mill, Maruti Cements and Asian Thai Food, among others.

“Owners of 14 firms are found to have bribed officials at the distribution centers to ensure 24-hour power supply,” the probe committee member told Republica.

The member said the firms saved Rs 19 per unit of electricity consumed in the three-month period.

“Now, it is up to board of directors of the NEA to take actions against the perpetrators," the member said.

The investigation team led by Sundar Shyam Shrestha, deputy director general of the Department of Electricity Development (DoED), comprised three officials from the ministry and a representative from the NEA.

Source: myrepublica, 13th May 2013

You may also like:
Nepali consumers paying more than stated price for Fizzy drinks 

Read More

Nepal's Commodity Market expected to remain Unregulated

KATHMANDU, NEPAL

 The commodity market is unlikely to be regulated anytime soon as the Law Ministry has rejected the idea of controlling it by issuing a regulation. Speculative trading in commodity like precious and industrial metals, petroleum products and agricultural goods, among others, has been the major highlight of the commodity exchange.

Prompted by reports of gullible investors being deceived in the unregulated market, the government has been working to monitor the sector through a regulation as there is no act and there is no Parliament to pass legislation. According to a study conducted by the Securities Board of Nepal (Sebon), 80 percent of the investors in the commodity market have lost money.

However, the Law Ministry has told the Finance Ministry that there should be a separate act to regulate the sector as a regulation would not be strong enough to keep the market in line.

The Finance Ministry had suggested preparing a draft of the regulation based on the rights bestowed by Administrative Procedures (Regulation) Act 1956 which allows the government to frame rules to smoothly regulate administrative matters adopted by various government offices related to finance, accounts and auditing.

The Law Ministry’s joint secretary Tek Prasad Dhungana said that this act only allows the government to frame working procedures to ease service delivery. “As the commodity market needs a strong supervisory and licensing body, and there should be a provision for penalty for unlawful acts, we told the Finance Ministry that only an act would be effective,” Dhungana said. He added that there was a need for a separate act to regulate the sector as commodity were different from stocks.
The Finance Ministry had sent a draft of the regulation to the Law Ministry after  Sebon made an initial draft which would allow it to regulate the commodity market by introducing the regulation under the Administrative Procedures (Regulation) Act.

According to a Finance Ministry official, the Law Ministry had rejected an earlier draft of the regulation that sought to open the door through clause 116 of the Securities Act enabling the Securities Board of Nepal (Sebon) to regulate the sector. The clause has given Sebon the power to frame rules stating that it may, in order to implement the objectives of this act, frame necessary rules with the approval of the government.

Although this clause has given Sebon the authority to frame regulations for various tasks related to securities trade, it has not mentioned anything about the commodity market. “The Law Ministry has rejected framing the regulation based on this clause in the Securities Act as it does not say anything about the commodity market,” said the Finance Ministry official involved in drafting the regulation.

 The Sebon study also found that the commodity market had been conducting transactions in foreign exchange without the central bank’s approval as required by the Foreign Exchange Regulation Act. It also pointed out that there was high probability of capital flight and high chances of investors suffering losses.

Source:ekantipur.com May 13th 2013

You may also like:
Canadian Investors now in Nepal and looking to invest in Nepal
 

Read More

Canadian Investors now in Nepal and looking to Invest in Nepal

KATHMANDU, NEPAL

 Big investors from Canada have showed interest toward Nepal at a time when foreigners are disenchanted by political uncertainty in Nepal. Foreign investors, who were staying away from Nepal following the dissolution of Constituent Assembly (CA), have started to arrive in Nepal even as the activities for fresh election gather momentum.

A 14-member Canadian team including eight entrepreneurs and six high ranking representatives reached Nepal on Sunday. The team that is in Nepal on invitation of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) will hold discussions on investment possibilities in Nepal. The team will study about banks, hospitals, education consultancies, hydropower projects, residential colonies, hotels, resorts, urban designing and handicrafts while in Nepal.

The team includes Canadian Ambassador to Nepal Stewart Beck, representative of the High Commission of Canada in India Archana Mirajkar, Nadira Hamid from Indo-Canadian Business Chamber, Harsha Dhingra from Bombardier, Debaissh Guha from Arcop Associates among others.

Source: Karobar Daily, May 5th 2013

You may also like:
Nepali Consumers paying more than stated price for Fizzy drinks

Read More

Nepali Consumers paying more than stated price for Fizzy drinks

KATHMANDU, Nepal

 Consumers have been forced to pay more despite the Bottlers Nepal advertizing that the retail price of a 250 ml bottle of Coca Cola, Fanta and Sprite has been reduced by Rs 5 to Rs 20.

Consumers are forced to pay Rs 25-30 for a bottle of these cold drinks at different places. Neither the retailers have answers for this, nor has the company, or consumer rights groups for that matter, shown interest about it. Coca Cola SABCO, through Bottlers Nepal, had received rights for bottling the beverages of the multi-national company in Nepal in 1971. The retailers claimed that the company charges Rs 20 per 250 ml bottle with them. “The company sells to us at Rs 20. How can we sell at that price? We also have to add the cost of running the refrigerator round the clock to keep it cold,” a retailer in Baneshwore said.  Not just him but all the retailers across the Kathmandu Valley charge Rs 25-30 for every 250 ml bottle of these beverages.

Botlers Nepal has been claiming through big hoarding boards and advertisements in all forms of the media that the retail price of 250 ml bottle of Coca Cola, Fanta and Sprite has been reduced by Rs 5 to Rs 20. “We must get it a lower rate to be able to sell at Rs 20,” a retailer at Thamel fumed. “The price is above Rs 30 in many small/big shops in Thamel,” he added. All retailers, with a few exceptions, are selling these beverages charging at least Rs 5 more for every 250 ml bottle. Owner of one Shiva Shakti Store in Buddha Nagar stated that he is selling at Rs 20 per bottle as he gets two bottles free while buying a crate (24 bottles). “I get a bottle at Rs 18 if I also account for the two bottles received for free. Though all retailers around here are selling at Rs 25, I am not doing so. I can sell more at a lower rate,” he explained.  

Market Manager of Bottlers Nepal Pranaya Sthapit also claimed that the company has set the retail price providing a profit margin to the retailers. “We are providing every bottle to retailers for Rs 18 at most. We have, therefore, requested them to sell to consumers at Rs 20. We have not deceived the consumers from our side,” he elaborated. He opined that the consumers themselves have to be aware about that. “We have provided such margins precisely because using refrigerator to cool it increases the cost as it is sold only after being cooled. No one can sell at a rate higher than that printed on bottles,” he stated.

 General Secretary of the Consumers’ Rights Protection Forum Jyoti Baniya claimed that consumers cannot be forced to pay more if the company has mentioned Rs 20 as the maximum retail price on the bottle or packet. “The consumers have asked even us about this. If the company as not been able to provide it to the consumers at the stated price, it cannot broadcast such misleading advertisements,” he stated. If the company has fixed the retail price at Rs 20 providing any profit margin to the retailers, he added, and the retailers are maintaining a bigger margin raising the price, the retailers are guilty.

Source: Karobar Daily, May 9th 2013

You may also like:
Commercial Banks in Nepal facing tighter liquidity situation

Read More

Jewellers claim 85 percent of Gold from Black Market

CHITWAN, Nepal
Jewelers in Chitwan have audaciously declared that 85 percent of the gold comes through black marketing and challenged the state to investigate and take action if it can at a time when there have been widespread accusations of black marketing in bullion trade.

 Organizing a press conference in Narayangadh they claimed that they are forced to buy gold from the black market due to the imposition of quota system in gold by the state. “The government is giving less gold imposing the quota system. It is natural for black marketing to rise in scarcity,” reasoned central member of the Nepal Gold and Silver Dealers’ Association Arjun Rasaily. The jewelers even reached the district administration office and submitted a memorandum to the government.  

The Gold and Silver Dealers’ Association, Chitwan revealed that Chitwan gets just two kilograms of gold a day through the quota system while the daily demand is seven kilograms. The entrepreneurs are still selling gold to the customers. “85 percent of gold comes from the black market and even the government knows that,” was Rasaily’s straightforward answer to the journalists question as to where the rest of the gold comes from. President of the association in Chitwan Bipin Ramudamu went further and accused the government of encouraging the entrepreneurs to indulge in black marketing. “Not giving gold is tantamount to asking one to do black marketing. Why would one buy gold from outside if adequate quantity is to come legally?” he argued.

The entrepreneurs cannot freely buy gold now with the government imposing a national quota of 15 kilograms a day. There is a huge demand of the yellow metal now due to the wedding season. Stating that the entrepreneurs have to pay Rs 2,000- 3,000 more in purchase of every kilogram of gold from commercial banks according to the quota system, they have asked the government to make arrangements to ensure that every entrepreneur can easily get up to 100 grams of gold a day. “Black marketing will not stop if that is not done and the state must pay attention to it,” central member of the association Gyanendra Man Shakya said.

The association sent a memorandum including these demands to the government through the district administration office. They also demanded modern equipment for measuring the quality of gold and fixing the standards for measuring it, establishment of a body for measuring weight and quality in Chitwan, and security for the entrepreneurs. Ramdamu said a meeting of the presidents of the district chapters across the country has been called in Chitwan on Wednesday for discussions on the problems in their trade. “We will decide how to move forward in the coming days in that meeting. The remaining protest programs will also be decided,” he added. The entrepreneurs already have threatened to shut down all the jewelry stores if their demands are not met by Wednesday. “No jewelry stores will open from Thursday if our demands are not fulfilled,” Rasaily said.

 

Source: Karobar Daily, 30th April 2013

You may also like:

Trishuli set to become a major hydropower site

Read More

Happy Mother's Day 2070

Shankha Binayak Saving and Credit Cooperative family would like to wish all mothers a very Happy Mother's Day 2070 (Mata Tirtha Aunsi 2070).

Read More